Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Characteristics of a Corporation

Financial Accounting

12. Stockholders' Equity

Characteristics of a Corporation

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Multiple Choice

Which of the following is usually a right of common shareholders in a corporation?

The right to approve the appointment of the external auditor

The right to vote in the election of the board of directors

The right to set the corporation's management salaries

The right to receive a fixed dividend each year

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Verified step by step guidance

Understand the role of common shareholders in a corporation. Common shareholders are individuals or entities that own common stock in a company, which typically grants them certain rights and privileges.

Review the typical rights of common shareholders. These rights often include voting in corporate matters, receiving dividends (if declared), and having a residual claim on assets in the event of liquidation.

Analyze the options provided in the question. Evaluate each option to determine whether it aligns with the rights commonly granted to shareholders. For example, common shareholders generally do not have the right to approve the appointment of external auditors or set management salaries.

Focus on the right to vote in the election of the board of directors. This is a fundamental right of common shareholders, as they have a say in the governance of the corporation by electing individuals to oversee its operations.

Conclude that the correct answer is the right to vote in the election of the board of directors, as this is a standard privilege associated with owning common stock in a corporation.